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Review: The Flaw of Averages, by Sam L. Savage

From The Objective Standard, Vol. 5, No. 3.

The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty, by Sam L. Savage. Hoboken, NJ: John Wiley & Sons Inc., 2009. 412 pp. $27.95 (cloth).

Consider a drunk staggering down the middle of a busy highway and assume that his average position is the centerline. The state of the drunk at his average position is alive, but on average, he’s dead. (p. 83)

flaw-averagesThis is an example of the danger of the “Flaw of Averages,” Sam Savage’s term for the common mistake of “representing an uncertain number by its average” (p. 59). “Plans based on average assumptions are wrong on average,” he explains. “In everyday life, the Flaw of Averages ensures that plans based on the average customer demand, average completion time . . . and other uncertainties are . . . behind schedule, and beyond budget” (p. 11, emphasis original). In The Flaw of Averages, Savage demonstrates the harm caused by the error and arms his readers with skills to avoid it. . . .

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